Assessing the “Public Need” of a Liquor License

In order to acquire a liquor license for a location not previously licensed, you must demonstrate “public need.” There may be both support and opposition regarding your application. Several factors are considered when assessing “public need.”

Acquiring a liquor license for a location not previously licensed to sell alcohol requires an applicant to demonstrate “public need” for a license in that location. Accordingly, applicants seeking retail licenses, such as those authorizing the sale of alcoholic beverages at bars, restaurants and package stores, must be able to demonstrate, through testimony or other forms of evidence, that the proposed location of their business has a “public need” for a license. The “public need” standard is one way for local licensing authorities (LLAs) to ensure liquor licenses are placed in neighborhoods where there are not already an abundant number of bars, restaurants or package stores.

But just how does an LLA decide whether or not the “public need” standard is met, and what happens when some members of the community oppose a newly licensed establishment in their neighborhood while others in the community express their support?

By law, when assessing “public need,” an LLA is required to look at a variety of factors prior to making its decision. Relevant considerations include: the number of pre-existing licenses in the proposed area, the traffic and noise in the proposed area, the opinions of the neighborhood, and the overall reputation of the applicant. An LLA has the discretion to “exercise judgment about public convenience and public good that is very broad, but is not untrammeled.” Accordingly, when an LLA denies the transfer or grant of a license, it must be able to back its denial with evidential support. If not, an LLA’s decision is deemed “arbitrary and capricious” and may likely be overruled by the Alcoholic Beverages Control Commission (ABCC) in the event that the license applicant appeals it.

Pursuant to Massachusetts General Law, Chapter 138, § 23, an LLA has the authority to approve the grant or transfer of a license “with a view only to serve the public need and in such a manner as to protect the common good.” This “public need” standard does not refer to “need in the literal sense,” but instead invokes an “assessment of public want and the appropriateness of a liquor license at a particular location.” ABCC Decision in re: Murflix, Inc. d/b/a Murphy’s Package Store, 303 Main St., Falmouth, MA (October 10, 2012) (quoting, Ballarin, Inc. v. Licensing Board of Boston, 49 Mass. App. Ct. 506, 511-12 (2000)).

Although a neighborhood’s opinions and concerns regarding the license application are relevant, standing alone they are insufficient for denial of the application. At a license applicant’s hearing, wherein a licensing board votes to deny or grant a license application, mere recitals of adverse testimony by locals will not be adequate evidence for the application’s denial. “Recitals of testimony do not constitute findings.”

In late 2012, the Law Offices of John P. Connell, P.C. represented a liquor store owner in an ABCC appeal after he had tried to relocate his store from one location in Falmouth to a larger store location across town. Initially, the LLA had rejected the transfer of location after neighborhood opponents voiced concern that the new store location would generate unwanted parking and traffic issues. On Appeal, however, the ABCC overruled the LLA’s decision to deny the transfer, stating the LLA based its decision on a “parade of horribles,” which were inconsistent with the LLA’s own departmental findings. The ABCC found that “the opposition of the neighborhood, albeit an important factor for a licensing board to consider, does not convert the exercise of a licensing board’s adjudicatory function into a plebiscite.” In other words, the ABCC found that an LLA cannot simply defer to a few vocal opponents without independent findings that there is in fact no “public need.”

While an LLA may exercise significant discretion when making decisions regarding the approval of a grant or transfer of a liquor license, it does not have the authority to deny such approval without sufficient evidence to support its decision. A license applicant’s good standing and overall reputation in the community will ease the process of gaining the LLA’s approval. Therefore, a license applicant should try to show a demonstrable demand for a liquor license in the proposed location of its business through supportive speakers, political or neighborhood representatives, or through other means of evidence. The applicant should also show that there is a plan to handle parking and traffic issues as well as other potential concerns, and, perhaps most importantly, demonstrate significant community outreach before the hearing so as to hear and potentially address the issues of the neighbors.

An applicant for a license should not merely show up at his or her hearing and hope for the best without adequately preparing, as this will almost never convince an LLA that a scarce liquor license should be allocated to such an applicant.

Courtney N. McGee, Candidate for J.D. also contributed to this article.